Solving city's cable competition crunch

Six months ago, the City Council voted to authorize a TV franchise for Verizon, opening up the possibility that for the first time, New Yorkers would see real competition for cable service. Now the process seems stalled amid a deafening silence from those involved. It's time to assess what's going on and what needs to be done to allow Verizon to take on Cablevision and Time Warner Cable.

The battlefield can be easily described. Verizon is spending some $20 billion to rewire its entire network so it can provide phone, Internet and TV service to all its customers. It has no choice, since customers are deserting the company in droves — as many as 1,000 a week in New York state — to take advantage of the packages being heavily promoted by cable companies. By the way, Verizon's FiOS service is a technically advanced product that is winning raves in the marketplace.

Despite all the money that Verizon is shelling out, cable companies have the upper hand: They have been able to offer phone service without facing any of the regulatory barriers that Verizon must clear before it can offer cable.

To exploit their opportunity, the cable companies are seeking to delay competition from Verizon any way they can. They're arguing that Verizon won't pay for the same community benefits they do, and that the phone company will provide service only in higher-income neighborhoods.

The City Council didn't give the cable companies' arguments much credence — probably because Time Warner and Cablevision aren't very popular with their constituents, who want an alternative to their services. The Bloomberg administration appears to be more sympathetic as it tries to set the parameters for a franchise. The question is, why?

Since Bloomberg LP operates a cable network, the mayor has handed off all decisions about cable service to Deputy Mayor Daniel Doctoroff. Mr. Doctoroff is a busy man, and it's possible he doesn't have time to focus on the issue. He certainly would have no sympathy for Cablevision, his enemy in the fight for a West Side stadium. He may be more favorably inclined toward Time Warner. But in any event, Mr. Doctoroff no doubt understands that competition is preferable to monopoly.

Some sources close to the talks say the big sticking point is that Verizon won't commit to providing service throughout the city. The company says that isn't true, although only those on the inside know for sure what's going on.

In a way, it doesn't matter. Verizon should have the same easy access to the TV business that cable companies have to the phone business. The cable companies took decades to build out their networks here, and Verizon should be given the same consideration. Of course, the company will develop its New York system faster if it can actually get some revenue by offering its service now.

A bill is now working its way through Albany that would sweep away local control in favor of statewide cable franchises. But its prospects seem dismal, since — as anyone who has followed the stadium and Moynihan station controversies knows — Assembly Speaker Sheldon Silver can usually be counted on to do whatever Cablevision wants. And the company doesn't want a statewide franchise for Verizon.

That puts the issue back in the hands of Mr. Doctoroff and the city. How long will they make New Yorkers wait for cable competition?

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